ATTORNEY General and Minister Responsible for ICBC David Eby said on Monday that the provincial government is committed to fixing systemic financial problems at ICBC to make life more affordable for British Columbians.
As one of his first actions as minister responsible, Eby requested that ICBC make public a 203-page report by the consulting firm Ernst & Young into mounting financial problems at the insurance corporation. Subsequent to the minister’s request, ICBC released the full report, which is available online: www.icbc.com
“This report makes it clear that ICBC has been in crisis for years, something which the former Liberal government largely ignored. Rather than addressing the serious issues facing the corporation, the BC Liberals used insurance fees as a rapidly growing hidden tax. Drivers have been paying the price,” said Eby.
“I can assure British Columbians that help is finally here as our government is committed to working with the public, ICBC’s board, its executive and stakeholders to make rates affordable for people.”
The new government will consider recommendations made in the report that could reduce accidents, injuries, deaths and claim costs. Recent trends show the accident rate in B.C. is rising with a 23% increase in crashes between 2013 and 2016.
“However, I want to assure British Columbians that we are not considering photo radar or moving to a no-fault system for auto insurance,” said Eby.
“There are some obvious solutions that we will look at. For example, the former Liberal government missed such basic ones, such as ensuring good drivers are rewarded while bad drivers pay more. We will focus on finding answers that put the corporation back on stable financial footing, while maintaining our number one priority of making rates affordable,” added Eby.
ICBC issued the following statement on Monday:
On December 19, 2016, the Minister responsible for ICBC at the time, Todd Stone, directed ICBC’s board of directors to commission a comprehensive, third-party, independent review of the fairness and affordability of basic insurance rates. Ernst & Young conducted the review, independent of ICBC management, and provided the final report, titled “Affordable and effective auto insurance – A new road forward for British Columbia”, to ICBC’s board on July 10, 2017. The Board then provided the report to government. The new chair of ICBC, appointed on July 20, received the report on July 21. One media outlet was able to obtain a copy of the report last week. Subsequently, at the request of Minister David Eby, ICBC has released the full report which can be read here.
ICBC has only just begun to review the details of the report; however, the significant external pressures on auto insurance rates outlined in the report are consistent with what ICBC has reported to the British Columbia Utilities Commission and communicated to the public over the last few years. These pressures, many of which have been seen throughout the auto insurance industry across North America, include a rapid acceleration in the number of crashes, the number of claims and the cost of those claims.
These pressures are having a major impact on the cost of basic auto insurance and the report provides a range of potential options to keep rates affordable in the long-term. These solutions are complex and require further analysis and discussion. ICBC is looking forward to working with the Board and government on solutions which make sense for British Columbia.